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its officers, who were also shareholders, exceeded reasonable
compensation.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. At the
time the petition was filed, petitioner’s principal place of
business was in Tacoma, Washington. During the year in issue,
petitioner produced and sold stove-top grills, stove-top burner
covers, and other kitchen accessories.
Petitioner was incorporated in the State of Washington on
September 5, 1979, by Max Burton. Max Burton was the father of
Linda Burton (Ms. Burton) and Alfred Burton (Mr. Burton) and the
husband of Evelyn Burton. Ms. Burton was married to Robert
Denovan (Denovan).
From September 13, 1979, through June 30, 1983, Max Burton
served as president and treasurer, and Mr. Burton served as vice
president and secretary, of petitioner. From July 1, 1983,
through his death on July 3, 1997, Max Burton was president and
treasurer, Ms. Burton was vice president, and Mr. Burton was
secretary, of petitioner. From July 7, 1987, through June 30,
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